State aid and competitive neutrality are the two important principles for public entities that must be respected to ensure the fairness and efficiency of their activities in the market. These principles are essential to prevent market distortions and promote fair competition between public and private companies. While these concepts have recently gained more attention, their interactions have not yet been sufficiently explored. This article discusses how they influence and complement each other.

On 1 January 2025, significant changes to the personal income tax (PIT) legislation came into force. Continuing our tradition, we have prepared an overview of the application of PIT, mandatory national social insurance contributions (MNSIC), and solidarity tax (ST) on salaries and wages in 2025.

In the Baltic countries, the format of the transfer pricing (TP) documentation and the scope of the information to be provided therein are largely uniform and in line with the revised TP documentation standard of the Organisation for Economic Co-operation and Development (OECD). However, the thresholds set by Latvia and its neighbouring countries, above which the corporate taxpayer (CTP) is obliged to prepare and submit TP documentation to the tax administration annually or upon request, differ significantly. In addition, different deadlines have been set for the preparation of TP documentation and the liability for non-compliance with the mandatory requirements. The approach to determining the arm’s length price (market value) is also different in each of the Baltic countries.

Directive (EU) 2023/2225 requires businesses to provide fair treatment and transparency in their loan ads and credit agreements, promoting the protection of consumer rights and the efficiency of the single market.

E-invoicing is becoming an important tool for businesses around the world, boosting efficiency, reducing the likelihood of errors, and securing tax compliance. Yet companies that have chosen to outsource their accounting function are not sure about who is to take responsibility for implementing and managing e-invoices. This article examines key roles, responsibilities and principles of collaboration that will help companies implement an e-invoicing system successfully.

Businesses, especially those with cross-border operations, are not finding it easy to apply value added tax (VAT).

In the context of domestic as well as cross-border transactions, we have discussed more than once how a customer’s free transfer of equipment to a service provider affects the amount of a subsequent supply of services. In practice, there are situations where a service provider lacks some specific equipment he needs for providing services to a customer, and the customer transfers the necessary equipment to the service provider free of charge. Also, there was uncertainty as to whether such a transactional structure affects the customer’s right to deduct input VAT on the equipment.

In its recent judgment C-475/23 Voestalpine Giesserei Linz GmbH, the Court of Justice of the European Union (CJEU) has ruled on the right to deduct input VAT in such a transactional structure.

In this article we present the CJEU’s perspective on this issue.

Central and local government agencies have been required to create accessible Web content since 2016. This is prescribed by Directive (EU) 2016/2102 of the European Parliament and of the Council of 26 October 2016 on the accessibility of websites and mobile applications of public sector bodies passed in 2016. However, studies suggest that it’s still very difficult for people with disabilities to access information in the way they need. For example, in August 2024, having surveyed 15 websites run by central and local government agencies, the Ombudsman found that none of them is fully accessible to people with disabilities. In this article we will explain what accessibility is and why it’s important for businesses, as well as exploring the essence of accessibility to digital resources and services, the rationale, legislation, practices and recommendations for providing accessibility successfully.
 

As part of adopting the yearly national budget, Parliament passed several key tax amendments in their final reading on 4 December 2024, which are in force but will apply from 1 January 2025. In this article, we look at the most important changes affecting people and businesses, with changes to personal income tax (PIT) and other taxes.

On 31 October 2024 Parliament passed the State Revenue Service (SRS) Act and the Tax and Customs Police Act (the ‘Police Act’) in their final reading to separate the Internal Security Board and the Tax and Customs Police Board from the SRS. These legislative changes will carry out the Ministry of Finance’s (MOF) intention of reorganising the SRS to carve out investigatory and operational functions. The new legal framework will result in the SRS being only tasked with the provision of advice, support and services in the field of tax and customs.

In the digital age, with technology becoming the basis for business process transformation, the synergies between e-invoicing and AI offer great potential for improving efficiency, accuracy and compliance. Yet the rapid evolution of AI technology increases the need for a clear set of rules to secure ethical practices and data protection. In this article we look at how the integration of e-invoicing and AI technology changes business operations, what the main challenges are, and what aspects organisations need to consider when adapting to the evolving regulatory environment.

To pick up where we left off about preparing transfer pricing (TP) documentation, this article explores the advantages and disadvantages of a decentralised approach.

Claiming tax relief under a double tax treaty between two countries is an integral part of day-to-day practice for many Latvian taxpayers. A key condition for taking relief is a foreign residency certificate approved by the State Revenue Service (SRS). While in general cases a residency certificate is approved for five years, there are situations where the SRS challenges another country’s residency certificate for compliance with national criteria. For example, the Latvian Supreme Court has recently ruled on an SRS decision to approve a US residency certificate for only three months because the SRS believed the conditions for a five-year period had not been met. In this article we explore the Supreme Court’s findings and answer the main question of whether the SRS decision was justified.

In an earlier MindLink article we wrote about proposals for amending the value added tax (VAT) framework. The proposals mandate e-invoicing in cross-border transactions and require changes to how EU sales lists are completed. The proposals also place responsibility for collecting VAT on platforms through which transactions are made in the accommodation and transport sector, and the one-stop shop (OSS) scheme is to be expanded.

A recent ruling from the Court of Justice of the European Union (CJEU) addresses the VAT treatment of electricity supplied to users of electric vehicles (EVs) through a third-party network. The original proceedings involved a German company contesting the Swedish tax authority’s decision on electricity supplied in Sweden. The CJEU ruling emphasises clarity in VAT treatment and reinforces adherence to the VAT framework. In this article, we summarise the key arguments and facts the CJEU considered in its ruling.

Having a network of double tax treaties (DTTs) helps countries work together when it comes to taxes, as DTTs aim to prevent the double taxation of income earned by individuals or companies doing business in two or more countries. As for the latest developments in international taxation, in this article we will take a closer look at the technical aspects of the most-favoured-nation (MFN) clause, which is found in just a few DTTs and from October 2024 has been implemented in the DTT between France and Latvia. We will also look at the significance of the MFN regime for French companies wishing to expand their operations in Latvia.